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By CJP | December 4, 2008
Janes, if you love your Jeep, Saturn or Volvo, close your tender ears. Â Otherwise…from the Senate Banking Committee hearing in Washington today, we’ve learned:
- The companies combined are asking for access to $34 billion in loans and financing;
- All three CEOs not only drove themselves to D.C. (two said they switched off with a friend), they’ll be driving themselves back to Detroit;
- A portion of the massive and murky credit default swap market would be tripped by a bankruptcy of any of the three. Â Credit default swaps were called “the next shoe to drop” during the AIG hearings;
- A failure of the auto companies would be “cataclysmic” for the American economy, according to Mark Zandi, chief economist of Moody’s, adding, “You need to help them. Â Now.” Â
- Zandi explained that Chapter 11 would not be a restructuring, but would immediately lead to liquidation, since none of the companies could get financing that most firms access while they restructure;
- When Sen. Shelby asked if $34 billion was just the beginning of federal help for the companies, Zandi said, “There’s a high probability. Â Yes.”
You can see more from this somewhat disturbing hearing HERE.
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